2015 (10) TMI 151 - AT - Central Excise

Denial of refund claim - unutilised balance of CENVAT credit - Export of goods - Held that - Commissioner (Appeals) observed that the appellant has exported the goods and they are entitled for the refund of the CENVAT credit on the inputs used in the manufacture of export goods but for the said purpose, they have to establish the quantity gone into the manufacture of export goods and the CENVAT credit availed by them on the said inputs. It is further observed that the appellant failed to establish from the record as well as during the personal hearing that the amount in respect of which refund is claimed by them as the amount of CENVAT credit availed by them on the inputs, which were used in the manufacture of said exported goods during the period August to September 2008. The adjudicating authority observed that earlier adjudication order has not given findings on various issues. In my considered view, the findings of the adjudicating authority has acted as an appellate authority against earlier adjudication order, which is not permissible under the law. It is clear from the records that the appellant had submitted all the documents and the statements before the lower authorities, which were not looked into by the authorities below. So, the findings of the lower authorities cannot sustain. The adjudicating authority is required to examine the documents placed by the appellant. - Matter remanded back - Decided in favour of assessee.

Summary

Issues Involved:
Refund claim of unutilised CENVAT credit for the period from July 2008 to September 2008 under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 4/2006 and 5/2006-CE (NT) dated 14.03.2006 for inputs used in the manufacture of final products cleared for export under bond or letter of undertaking.

Analysis:
The appellants, engaged in the manufacture of Cotton Yarn/ Denim fabrics, filed a refund claim of unutilised balance of CENVAT credit amounting to Rs. 47,43,302 for the period from July 2008 to September 2008. The Assistant Commissioner, Central Excise, sanctioned the refund claim initially, but the Revenue filed an appeal before the Commissioner (Appeals) challenging this decision. The Commissioner (Appeals) set aside the initial order and directed a remand to the adjudicating authority for a speaking order. Meanwhile, a show cause notice was issued demanding the erroneously refunded amount to be recovered under the Central Excise Act, 1944. The Assistant Commissioner confirmed the demand along with interest, leading to further appeals by the appellant.

The appellant contended that they had followed the necessary procedures for filing the refund claim, as per Board Circular No. 845/3/2007-CX dated 01.2.2007, and had submitted relevant documents to support their claim. However, the Revenue argued that the appellant failed to produce documents regarding the utilization of inputs in the manufacture of exported goods, supporting the findings of the Commissioner (Appeals).

Upon examination, the Tribunal found that the lower authorities had not adequately considered the documents and statements submitted by the appellant. The Commissioner (Appeals) was noted to have observed that the appellant was entitled to the refund of CENVAT credit on inputs used in the manufacture of export goods but had not sufficiently established the quantity of inputs used and the credit availed. The Tribunal concluded that the findings of the lower authorities were not sustainable and remanded the matter to the adjudicating authority for a proper examination of the documents. The Tribunal dismissed one appeal as infructuous while setting aside the impugned order in another appeal for reconsideration.

In conclusion, the Tribunal emphasized the importance of a thorough examination of the documents provided by the appellant and directed the adjudicating authority to give a proper opportunity of hearing before making a decision. The judgment highlighted the necessity of establishing the link between the inputs used and the exported goods to claim the refund of CENVAT credit accurately.